Thought Leaders in E-Commerce: Gooten CMO Mark Kapczynski (Part 2)

Sramana Mitra: Are Shopify stores your largest customer base?

Mark Kapczynski: Most of our customers use Shopify stores, but we also have merchants that operate on places like Etsy, Amazon, WooCommerce, and BigCommerce. The bulk of them do use Shopify or a custom solution.

We have a raw API solution that people can tap into. It’s the full gamut. At the end of the day, we are more of a tech platform. Our goal is to integrate with whatever commerce platform that someone is using. 

Sramana Mitra: What is the size of the merchants? I’m familiar with Shopify’s customer base. They tend to be smaller merchants. Is that also your customer base?

Mark Kapczynski: No, that’s a misnomer. One of our partners is an agency. They build and power storefronts for mostly music bands – all forms from the Rolling Stones to Kiss. They power over 2,000 stores on Shopify. They are selling a lot of merchandise through their platforms as a whole. 

Sramana Mitra: That still jives with what I said. Each of those 2,000 stores are not huge stores; they are relatively small. 

Mark Kapczynski: If you are talking in terms of GMV, they are certainly not Amazon. They are also not the hobby shop where you sell a few items. They sell thousands of items per store per month. 

Sramana Mitra: Our read on Shopify is on the sub-$5 million merchant level. Once people get on the next level, they move to a more complex catalog system. Does that jive with you?

Mark Kapczynski: I think you are right. Shopify’s core base is that. They have bigger stores on top. If you also look at our partnerships, we are adding BigCommerce in as well. I think we focus on medium-sized to enterprise businesses.

I think Shopify’s notion is that they have so many stores, so they probably have the same enterprise customers as BigCommerce. They just have the long tail and the numbers get skewed. Shopify still deals with a lot of enterprise businesses. 

Sramana Mitra: From your point of view of your merchants, how many have crossed $1 million in revenue? 

Mark Kapczynski: Probably in the neighborhood of 20% to 30%.

Sramana Mitra: What other trend information can you provide that signifies something in the space that you are working with? Mostly custom merchandise and manufacturing on-demand is a corner of e-commerce. What other trends do you see in this corner of e-commerce? 

Mark Kapczynski: We like to look at it a little differently. We do work with larger enterprises that have bigger businesses. We aren’t just building personalized mugs and t-shirts. We focus on manufacturing and scale. When you look at it, it’s looking at how you introduce on-demand manufacturing into your mix.

One customer example that I was giving you, One Live, balances out what they should be selling out of a bulk inventory model and what they sell out of an on-demand manufacturing model. It’s always that blended mix of how much should we be doing in bulk versus how we should be doing on-demand. That’s the interesting notion and trend that we are seeing.

As you start to scale your business, it’s not a matter of one or the other. It’s a mix that makes the most sense for you and your business so that you can scale efficiently. That’s the unique thing about what we do. We help work with those enterprise businesses to figure out that manufacturing mix so that they could optimize their business. Bigger enterprises do have that mix.

We often refer to it as a bell curve where some products might start in the on-demand manufacturing world, then they might move into bulk inventory when there is a significant demand for a period of time. Then they move back into on-demand. It’s how the business balances out that trend of starting with on-demand, moving to bulk, and coming back to on-demand. 

This segment is part 2 in the series : Thought Leaders in E-Commerce: Gooten CMO Mark Kapczynski
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